Background: Qatar became independent from the UK in 1971. Sheikh Hamad bin Khalifa al-Thani, who toppled his father in a coup in 1995, pursued a programme of gradual political and economic reform, with a particular focus on developing the country's massive natural gas reserves. Sheikh Hamad officially handed power to his son, Sheikh Tamim bin Hamad al‑Thani, in a formal ceremony on June 25th 2013.

Political structure: Power in Qatar is concentrated in the hands of the emir, who governs with the assistance of a cabinet that he appoints. Under the 2004 constitution a new Advisory Council should be created, of which two-thirds of the members will be elected. However, the election of the council has been repeatedly delayed, most recently in June 2016, when the emir issued a decree to extend the term of the current (fully appointed) council to 2019. However, elections are now expected to happen in 2019 in an effort to further cement the domestic legitimacy of the government and amid indications that previous postponements of the elections were the result of Saudi pressure.

Policy issues: In April 2017 the government announced that it was lifting its 12-year moratorium on new gas export projects from the giant North Field (which it shares with Iran). It subsequently announced plans for three new liquefied natural gas (LNG) trains, aimed at boosting output by 23m tonnes/year by 2024. It will substantially boost growth and revenue—albeit only after the end of our forecast period. Meanwhile, economic policy will also continue to focus on promoting expansion in the non-oil sector, with pro-business reforms introduced to facilitate greater foreign participation in non-energy areas.

Taxation: Neither expatriates nor nationals are subject to personal taxation. Firms from outside the Gulf Co-operation Council are required to pay corporation tax, although this fell from a maximum of 35% to a flat rate of 10% in January 2010. (Profits in the hydrocarbons sector are taxed differently, according to the share of the project held by the foreign company and the level of capital investment.) Tax-free zones have been set up to attract foreign direct investment in industry.

Foreign trade: Merchandise exports, which are mainly oil, liquefied natural gas and petrochemicals, surged in the years up to 2014 as oil prices and energy export volumes rose. Despite rising import spending and a widening non-merchandise deficit, the current-account surplus peaked at US$60.5bn (30% of GDP) in 2013. The account moved into deficit in 2016 (by 5.5% of GDP), although it moved back into surplus in 2017 (by 3.8% of GDP) on the back of higher average oil prices.